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Kenney signs Philly tax on drinks into law, but legal challenge looms

Mayor Jim Kenney signs into law a 1.5 cents-per-ounce tax on sugary and diet beverages at City Hall in Philadelphia Monday. The tax will be levied on distributors and is set to take effect Jan. 1. (AP Photo/Matt Rourke)

Philadelphia Mayor Jim Kenney has signed the city’s new sweetened beverage tax into law.

In a ceremony at City Hall Monday morning, Kenney thanked the people who helped push for the tax on his behalf to help pay for expanded pre-K, community schools and a major reinvestment in parks, recreation centers and libraries.

“From the clergy to organized labor, the parks and rec advocates, the pre-K moms and dads, community school folks — you really did this for us,” Kenney said.

When a reporter asked what happens next now that the 1.5-cents-per-ounce tax is law, the mayor got a little cheeky.

“I go back to my office, have lunch,” he said.

But preparations are ramping up in the city’s revenue department, which is hiring 15 new staffers to help collect this and other taxes.

The sweetened beverage tax is levied on beverage distributors that sell to corner stores, supermarkets and other retailers. Deputy revenue commissioner Marisa Waxman said those distributors, whether in or outside the city limits, must register with the department by December.

“Retailers are going to have to simply just buy from a registered distributor,” she added. “They aren’t going to have any tax filing or any direct payment needs from the city, so it’s going to be really easy for retailers.”

Retailers who do not buy from a registered distributor will have to pay the tax, Waxman said.

However, the future of the tax is uncertain. The soda industry is planning to sue the city to stop it, arguing it violates the Pennsylvania Constitution. The American Beverage Association announced Monday it has retained the Center City law firm Kline and Specter, P.C. to pursue legal action.